Centralization and Decentralization

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

Centralization and DecentralizationCentralization and Decentralization? Description

An organization has to make strategic and operational decisions. Where and by whom should these decisions be made? And: how should the organization structure be adapted? Centralization and Decentralization are two opposite ways to transfer decision-making power and to change the organizational structure of organizations accordingly.



  • Definition: The process of transferring and assigning decision-making authority to higher levels of an organizational hierarchy.
  • In a centralized organization, the decision-making has been moved to higher levels or tiers of the organization, such as a head office, or a corporate center.
  • Knowledge, information and ideas are concentrated at the top, and decisions are cascaded down the organization.
  • The span of control of top managers is relatively broad, and there are relatively many tiers in the organization. Compare: Fayol.


  • Definition: The process of transferring and assigning decision-making authority to lower levels of an organizational hierarchy.
  • In a decentralized organization, the decision-making has been moved to lower levels or tiers of the organization, such as divisions, branches, departments or subsidiaries.
  • Knowledge, information and ideas are flowing from the bottom to the top of the organization.
  • The span of control of top managers is relatively small, and there are relatively few tiers in the organization, because there is more autonomy in the lower ranks.

Three Forms of decentralization

  • Deconcentration. The weakest form of decentralization. Decision making authority is redistributed to lower or regional levels of the same central organization.
  • Delegation. A more extensive form of decentralization. Through delegation the responsibility for decision-making is transferred to semi-autonomous organizations not wholly controlled by the central organization, but ultimately accountable to it.
  • Devolution. A third type of decentralization is devolution. The authority for decision-making is transferred completely to autonomous organizational units.

Strengths of Centralization. Characteristics

  • Philosophy / emphasis on: top-down control, leadership, vision, strategy.

  • Decision-making: strong, authoritarian, visionary, charismatic.

  • Organizational change: shaped by top, vision of leader.
  • Execution: decisive, fast, coordinated. Able to respond quickly to major issues and changes.
  • Uniformity. Low risk of dissent or conflicts between parts of the organization.

Strengths of Decentralization. Characteristics

  • Philosophy / emphasis on: bottom-up, political, cultural and learning dynamics.
  • Decision-making: democratic, participative, detailed.
  • Organizational change: emerging from interactions, organizational dynamics.
  • Execution: evolutionary, emergent. Flexible to adapt to minor issues and changes.
  • Participation, accountability. Low risk of not-invented-here behavior.
Centralization and Decentralization Special Interest Group

Special Interest Group (422 members)

Forum about Centralization and Decentralization  

The most recent topics about: Centralization and Decentralization.

Ricardo Semler: Democratization Instead of Decentralization
Decentralization has been around for very long, but with protracted results due to top-down hierarchical organization st (...)
1 reactions
Similarities Between Centralization and Decentralization?
I'm looking for similarities between centralization and decentralization. What do they have in common? I will be gratefu (...)
1 reactions
🔥 NEW The Role of Decentralization in Developing Countries
Improving the communication in development projects in developing countries is very important. Because one major reason (...)
2 reactions
Best Practices about Centralization and Decentralization

Here you will find the most valuable ideas and practical suggestions.

🥇 Benefits of Decentralization. Advantages
1. Greater transparency and accountability. 2. Quick decision making, no long processes 3. Local problems get local so (...)
1 reactions

🥈 When is Centralization of Decision-making Better?
Please tell me the circumstances under which centralization is better than decentralization? Thanks (...)
3 reactions

🥉 The link between Centralization and Decentralization to Public Administration
What is the link between Centralization and Decentralization to Public Administration (...)
1 reactions

Divisions Versus Subsidiaries
I need some clarification of what is the difference between divisions and subsidiaries. Is there any significant distinc (...)
1 reactions

Decision-making in Germany
Would you say Germany typically has centralized or decentralized decision making? (...)
0 reactions

Decentralization Better for Small Businesses?
Decentralization argument works for large businesses. For a small business, it is better to have centralization. Do you (...)
5 reactions

Crisis: Centralization or Decentralization?
In a crisis situation, which one is better: centralized or decentralized? On one hand in a crisis condition urgent decis (...)
5 reactions

Types of Decentralization. Categories
I am looking for a further classification of decentralization types? Do you have a list of forms of decentralization? Pl (...)
0 reactions

Direct Communication in Decentralization
Is it possible that in decentralization the first line manager communicates directly with top management? (...)
2 reactions

Decentralization to Local Government
What is the importance of decentralization to local government? (...)
2 reactions

Implications of Delegation
How can one evaluate the implications of delegation in private companies, NGOs, and public companies? (...)
2 reactions

Decentralization Requires Involvement and Empowerment
Decentralization is preferred to centralization in many cases. But decentralized systems need to look at involving each (...)
4 reactions

Expert Tips about Centralization and Decentralization

Here you will find professional advices by experts.

Centralization and Decentralization

Advantages and Disadvantages (...)

Key Considerations in Deciding Upon your Organizational Design

Organization Set Up, Organizational Structure, Organizational Structure, Centralization, Span of Control, Departmentaliz (...)
Information Sources about Centralization and Decentralization

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Organization Design

Organizational Development (...)

Organizations and Structures

Organizational Structure, Departmentalization, Centralization, Decentralization (...)

Centralization and Decentralization Diagram

Centralization and Decentralization (...)

Compare with Centralization and Decentralization: Parenting Advantage  |  Parenting Styles  |  Core Competence  |  Organization Chart  |  14 Principles of Management  |  Bases of Social Power  |  Growth Phases  |  Organizational Configurations  |  Acquisition Integration Approaches  |  Business Process Reengineering  |  Chaos Theory

Return to Management Hub: Change & Organization  |  Decision-making & Valuation  |  Knowledge & Intangibles  |  Leadership  |  Strategy

More Management Methods, Models and Theory

Special Interest Group Leader

Are you an expert in Centralization and Decentralization? Sign up for free

Link to this knowledge center

Copy this code to your web site:


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2020 12manage - The Executive Fast Track. V15.6 - Last updated: 28-9-2020. All names ™ of their owners.